Alleviating the Burden
There’s a misconception that hiring a business accountant is an unnecessary expense for small business owners. However, poor financial management is one of the primary causes that most small businesses fail within their first 18 months of opening. With a closer look, you’ll soon discover that hiring a business accountant is a necessary investment for new business owners.
Do You Really Need A Business Accountant?
Does the thrill of bootstrapping your business turn you on? Bootstrapping (in business) typically refers to doing it yourself without an influx of capital. It is a common entrepreneur phenomenon, and mistake. When an entrepreneur bootstraps her business, it typically refers to her doing everything herself, without hiring external resources.
A closer look reveals the term to have originated in the early 19th-century United States. Originally “to pull oneself over a fence by one’s bootstraps”, was an absurdly impossible action. While romantic, chivalrous and valiant, is bootstrapping really a wise way to launch your business?
Launching a business is rife with challenges and obstacles. You may feel like you have to ‘scrimp and save’ to avoid going deeply into debt. One of the most popular ways to save money in a startup is to do everything by yourself. However, skimping and saving in some areas is just not wise. Read on to find out why every business, no matter how small, needs a business accountant to succeed. Here are six ways a business accountant can really help save your business and assist you even in the early stages of a startup.
1. Understand Financial Consequences
As a business owner, you may struggle with deciding how, when and where to spend money. Since there are myriad items, tools, and resources needed when you launch a business, it’s important to keep these in check. It’s essential for you to make sound financial decisions, carefully budget and monitor cash flow, oversee purchases and assess when to hire employees. These important decisions have financial consequences.
A Small Business CPA (Certified Public Accountant) can help. A CPA is an accounting professional who has passed the Uniform CPA examination and has also met additional state certification and experience requirements. A professional accountant can help you evaluate data, understand potential financial implications of purchases and expenses, and make sound financial decisions.
2. Tax Deductions
Startup business owners need to maximize deductions. Everyone knows accountants are incredible assets during tax season. But they’re even better able to help clients when they have access to their financial information year-round. Year-round access provides a dialog for a business accountant to strategize steps to maximize their year-end deductions.
Accountants help clients create systems to track out-of-pocket expenses and asset depreciation. A business accountant can save money during tax season that makes up for keeping one on staff.
3. Avoid Audits
Everyone is afraid of the potentially catastrophic financial problem of an audit. Businesses get audited for many reasons, from making mistakes on tax forms to claiming too many charitable donation deductions.
Business owners shouldn’t wait until after they have been audited to hire a business accountant. Instead, they should avoid this by investing in the future. Entrusting the company’s finances to a professional from the beginning. Small business accountants can work with their clients to ensure that everything goes smoothly during tax season and beyond.
4. Save Time
Another reason to invest in a business accountant is to save time. If you’re trying to manage your own finances, you’ll often wind up wasting large amounts of time. Instead of trying to understand complex laws and regulations, you can rely on your professional accountant. Your time is money. You should spend your time (which is your most valuable asset) on networking, serving and selling. Leave the non-revenue generating aspects of running the business to other professionals. This strategy will help you increase profits and easily cover the costs of a business accountant.
5. Reduce Risk
Once your business gets off the ground and begins to grow, you need to make informed decisions and direct your own business operations. To avoid overwhelm, an accountant can help you figure out whether hiring help actually will make the business more money. Or she can evaluate your business finances to determine its time to upgrade. Accountants are well-informed about economic theories, which helps to reduce your risk.
6. Stay Informed
Local, state, and federal tax laws and financial regulations change. Hiring a business accountant is the best way to stay on top of the latest changes. An accountant can help you to avoid audits and ensure your business is following all relevant financial regulations. Regularly meeting with your accountant can help you stay informed and on track.
The Bottom Line
Accountants do far more than just help business owners get their taxes in order and deal with the IRS. A CPA or business accountant regularly offers sage financial advice. This can help your new business get off the ground, grow, and find ways to invest in your future. That’s why entrepreneurs in every stage of business should find an accountant they can trust. A business accountant will serve as a partner to help you handle finances so you can focus on other important aspects of running your growing business.
Please Share Your Thoughts
Have you invested in a business accountant? Has it helped grow your business? Please share with us in the comments below! We love learning from our readers.